Rupee to stabilise very soon: Official
Kolkata, Aug 18 : The Indian rupee, which has been depreciating against the dollar on account of external factors, will "stabilise" soon with the fundamental equation for trade unchanged, an official said here on Saturday.
"This breaching of 70 (mark) was on account of external factors largely on what happened in Turkey. Our fundamental equation for the trade has not been changed. Oil prices have not gone up.
"The demand-supply situation for dollars in the Indian economy has not got altered... our perception is that very soon it (rupee) will stabilise and it might go back to Rs 68-69," Union Finance Ministry's Department of Economic Affairs Secretary Subhas Chandra Garg said here.
On Thursday, the rupee had touched an all time low of 70.39-40 in the spot market and settled at a record closing low of 70.16 against the greenback.
Speaking on capital outflow, Garg said: "There was an outflow of $9 billion in terms of portfolio investments in the first three months of the current fiscal and last year, we had a inflow of $20 billion. But in July, there was no outflow. In August, there is positive inflow of about $1.5 billion."
"It makes it clear that the episode arising out of Turkey essentially does not alter FPIs' (Foreign Portfolio Investors) perception about the investability of India. I do not think that will change," he said on the sidelines of a Merchants' Chamber of Commerce and Industry's event.
Garg also said that public sector banks, which are under Prompt Corrective Actions (PCA) imposed by the Reserve Bank of India, would do better going forward and there would be lesser requirement for provisioning of bad loans.
"Profitability of these banks will be coming back. They are expected to come out of PCA in the next 1-2 years," he added.
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Rupee hits record intra-day low in early trade, falls 12 paise to 92.37 against US dollar
Mumbai (PTI): The rupee slumped 12 paise to its record low of 92.37 against the US dollar in early trade on Friday as global crude oil prices showed no signs of easing amid the ongoing West Asian conflict.
A stronger greenback, heavy FII selling and weak sentiments in the domestic equity markets further weighed on the rupee, according to forex traders.
At the interbank foreign exchange, the local unit opened at 92.33 and slipped further to hit its record intra-day low of 92.37 against the US dollar, down 12 paise from its previous close.
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The rupee touched a fresh intra-day low of 92.36 on Thursday and closed the session 24 paise down at its lowest level of 92.25 against the US dollar.
"Oil prices remained elevated after Iran said the Strait of Hormuz is closed permanently till the resolution of the crisis. The dollar index also rose, European and Asian currencies all fell against the dollar," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
The rupee has remained vulnerable and in the absence of the RBI could have reached 93.00 levels, he added.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 99.77.
Brent crude, the global oil benchmark, was trading higher by 4.99 per cent at USD 96.57 per barrel in futures trade.
On the domestic equity market front, the Sensex plunged 560.06 points, or 0.74 per cent, to 75,474.36, while the Nifty tanked 184.45 points, or 0.78 per cent, to 23,454.70.
Foreign institutional investors sold equities worth Rs 7,049.87 crore on a net basis on Thursday, according to exchange data.
Meanwhile, retail inflation moved up to 3.21 per cent in February compared to 2.74 per cent in the preceding month, driven mainly by higher food prices, government data released on Thursday showed.
